Months after Channel 2 breakup, two top TV networks to merge
With both losing money, Reshet and Channel 10 win approval to join into a single large competitor against rival Keshet
Israel’s antitrust regulator has officially approved the merger of two major television networks, Reshet and Channel 10, effectively reversing the breakup of ratings powerhouse Channel 2 last year.
The companies’ shareholders asked for permission for the merger in June. It was formally approved by the Antitrust Authority on Wednesday.
Reshet broadcasts on channel 13, and Channel 10 — named before a reorganization shifted the numbers around — on channel 14.
The move comes only ten months after a government-led major reorganization of the television industry that broke Israel’s most popular channel, Channel 2, into two competing networks run by the two production companies that had previously split the channel between them: Reshet and Keshet. The move was explained by officials at the time as necessary to ensure competition amid the overwhelming ratings dominance of Channel 2.
Financial troubles are not a new experience for Channel 10, which has faced the threat of closure since 2014 over lackluster ratings and low advertising revenues.
The Reshet-Channel 10 merger comes amid rising financial losses for both companies that could reach into the hundreds of millions of shekels annually and that officials have pinned on the relatively small Israeli viewing market failing to support three commercial channels.
With the new merger, Israel’s commercial television landscape will again be dominated by just two channels.
The main public broadcasting television channel, once known as Channel 1, was also reorganized over the past year under the new public broadcaster, renamed Kan. It continues to trail far behind in the ratings.
The new company to be formed from Reshet and Channel 10 will see Reshet in control, with its shareholders owning some 60 percent of the network, while Channel 10 owner RGE will reportedly control 40%.
Both companies committed in their request to the Antitrust Authority to do their utmost to retain the employees of the two merging companies.
This may be an easy promise to deliver on, as Reshet specializes in entertainment and reality television programming, while Channel 10 has a prominent news operation and a highly praised documentary arm.
Keshet, the new company’s leading competitor on channel 12, will become sole owner of the Hadashot news network currently shared by Reshet and Keshet.
“The merger of Reshet 13, which has expertise in content, formats and reality [TV], and Channel 10, which has expertise in news, current events and documentary, will allow the merged company to operate in a stable fashion and offer the Israeli public better television,” read the letter from the two companies to the Antitrust Authority, according to the business daily The Marker.
The reorganization of Israel’s media landscape in recent years has also been accompanied by police graft probes of Prime Minister Benjamin Netanyahu, who was suspected of receiving gifts from billionaire Arnon Milchan, one of the owners of Channel 10, allegedly in order to influence his decisions about the channel’s future in recent years. Netanyahu served as communications minister, Israel’s top media regulator, from November 2014 to February 2017.